On 9 August 2021, these proceedings were commenced in the Tribunal as an application filed by Powered Projects Pty Ltd (applicant) against Sam Makis (Mr Makis) and Sams Solar Pty Ltd (respondents). The application was lodged online by Joshua Fleming (Mr Fleming) on behalf of the applicant and was commenced as matter to be dealt with in the Tribunal's General List; i.e. as a consumer claim against the respondents, in an amount of up to $16,716.65.
The applicant is a company that project manages for its customers installations of solar equipment. It sub-contracts installers to do various jobs for it. The application lodged with the Tribunal stated that the applicant had engaged the respondents via email to perform installations of solar equipment in the respondents' local area, that the respondents "used our private/privileged client information to cause our clients to cancel their contracts", and that the respondents "then proceeded to thieve the stock we had arranged for those installations". The applicant says that the respondents have "refused to respond or return the stock and as such we require the total valued amount (of) $16,716.65 … to be reimbursed".
On 10 August 2021, the parties were sent a Notice of Hearing informing them that the proceedings constituted by the application had been listed for conciliation and hearing in a virtual hearing room (VHR) on 2 September 2021. The back sheet of the Notice of Hearing contained directions which among other matters required the applicant to give to the respondents and to send to the Tribunal by 24 August 2021 any documents on which the applicant sought to rely in support of its claim.
On 24 August 2021, the Tribunal received a bundle of documents from the applicant, including company searches, copy tax invoices, copy statements of Goodwe Power Supply Technology Co Pty Ltd relating to the supply of solar installations, and copies of email correspondence between the parties.
At the conciliation and VHR hearing on 2 September 2021, Mr Fleming together with the applicant's Compliance and Maintenance Officer, Ms McKenzie, appeared for the applicant. Mr Makis who appeared on behalf of the respondents sought to have the proceedings dismissed on the basis that the Tribunal lacked the jurisdiction to hear and determine the applicant's claim. The Tribunal then adjourned the proceedings with a direction for the parties to provide submissions on the jurisdiction issue by 30 September 2021. The Tribunal's record of the conciliation and VHR hearing on 2 September 2021 notes the following matters under the heading 'Question of Jurisdiction':
The Respondent alleges that he is the consumer, and the Applicant is the supplier/trader, so there is no jurisdiction as a consumer claim under the Fair Trading Act.
The Applicant's brief summary suggests that the Respondent may have been acting as their sub-contractor/installer in relation to the installation of solar systems, in which case there is a potential building claim under the Home Building Act.
Parties are to make submissions in relation to these issues, and are encouraged to obtain legal advice in the preparation of these submissions.
The Applicant may decide to commence proceedings in a Court and discontinue the proceedings in this Tribunal, if deemed appropriate.
Powered Projects Pty Ltd v Makis [2021] NSWCATCD 150 | Case summary | Zoe
Following the conciliation and VHR hearing on 2 September 2021, the Tribunal transferred the proceedings to its Home Building List. The Divisional Registrar's Notice dated 3 September 2021 to the parties stated, relevantly:
The application was lodged in the General List.
The Tribunal may determine the proper list for dealing with any matter. The matter has been transferred to the Home Building List because the issues in dispute appear to relate to Debt Collection.
Legislation which is relevant to a determination in this List includes the NSW Civil and Administrative Tribunal Act 2013 and the Home Building Act 1989.
Both parties lodged further documents, following the direction of the Tribunal made on 2 September 2021 as to the 'Question of Jurisdiction'. On 6 October 2021, the Tribunal received the respondents' written submissions (of 2 pages) on jurisdiction and bearing date 30 September 2021; while the applicant's further documents were received by the Tribunal on 8 October 2021 and included a statement of Mr Fleming dated 17 September 2021 and a statement of delivery driver, Ashneel Singh dated 1 October 2021, as well as email correspondence and invoices.
The proceedings then came before me for directions on 19 October 2021. On that occasion, Mr Fleming on behalf of the applicant withdrew the applicant's application and the proceedings were dismissed. The respondents sought to be heard on the question of the costs of the proceedings, so I made directions for written submissions on costs.
The Tribunal has received the respondents' written submission on costs dated 1 November 2021 with attachments. No written submissions were received from the applicant. The respondents submit that an order dispensing with a hearing on costs should be made. I find that the question of costs can be adequately determined in the absence of the parties by considering the procedural history of the proceedings and the respondents' written submissions. In my view, the parties would be put to unnecessary expense if a formal hearing on the question of costs was held. I am therefore satisfied that the respondents' costs application is a matter which can be dealt with on the papers and that it is appropriate for the Tribunal to exercise its discretion under s 50(2) of the Civil and Administrative Tribunal Act 2013 NSW (NCAT Act) to dispense with a hearing and to proceed to determine the respondents' application for their costs of the proceedings on the papers.
The starting point in any application for costs is that parties to proceedings in the Tribunal are to pay their own costs: see s 60(1) of the NCAT Act. Subsection 60(2) provides costs are awarded only if the Tribunal is satisfied that there are: "special circumstances warranting an award of costs".
Subsections 60(3), (4) and (5) of the NCAT Act provide:
(3) In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following:
(a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings,
(b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings,
(c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law,
(d) the nature and complexity of the proceedings,
(e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance,
(f) whether a party has refused or failed to comply with the duty imposed by section 36 (3),
(g) any other matter that the Tribunal considers relevant.
(4) If costs are to be awarded by the Tribunal, the Tribunal may:
(a) determine by whom and to what extent costs are to be paid, and
(b) order costs to be assessed on the basis set out in the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014) or on any other basis.
(5) In this section:
"costs" includes:
(a) the costs of, or incidental to, proceedings in the Tribunal, and
(b) the costs of, or incidental to, the proceedings giving rise to the application or appeal, as well as the costs of or incidental to the application or appeal.
Rule 38 of the Civil and Administrative Tribunal Rules 2014 NSW (NCAT Rules) provides:
38 Costs in Consumer and Commercial Division of the Tribunal
(1) This rule applies to proceedings for the exercise of functions of the Tribunal that are allocated to the Consumer and Commercial Division of the Tribunal.
(2) Despite section 60 of the Act, the Tribunal may award costs in proceedings to which this rule applies even in the absence of special circumstances warranting such an award if--
(a) the amount claimed or in dispute in the proceedings is more than $10,000 but not more than $30,000 and the Tribunal has made an order under clause 10(2) of Schedule 4 to the Act in relation to the proceedings, or
(b) the amount claimed or in dispute in the proceedings is more than $30,000."
In these proceedings in the Consumer and Commercial Division of the Tribunal, the amount claimed by the applicant is $16,716.65. The Tribunal did not make an order under clause 10(2) of Schedule 4 of the NCAT Act; so that Rule 38(2)(a) does not apply. Nor does a case for an order for costs arise against the applicant under Rule 38(2)(b) of the NCAT Rules.
If, as in this instance, it is found that Rule 38 is not enlivened, then the standard position under s.60 of the NCAT Act is not displaced for the purposes of determining the costs of the proceedings: see Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25.
The effect of s.60(1) and (2) of the NCAT Act was set out in Allen v TriCare (Hastings) Limited at [71] and [76] as follows:
[71] Section 60 of the NCAT Act states the general proposition in subs (1) that each party to proceedings in the Tribunal is to pay the party's own costs. Section 60(2) modifies this by permitting the Tribunal to award costs but "only if it is satisfied that there are special circumstances warranting an order of costs".
…
[76] "[S]pecial circumstances" for the purposes of s.60(2), are those which are out of the ordinary but they do not have to be extraordinary or exceptional: see the Appeal Panel in CBD Holdings Pty Ltd v Baguley [2016] NSWCATAP 168 [6]; citing the Court of Appeal in Cripps v G & M Dawson Pty Ltd [2006] NSWCA 81 at [60] which concerned the same expression in the previous legislation governing the (then) Administrative Decisions Tribunal."
Even if special circumstances exist for the purposes of s 60(2) of the NCAT Act, it may still not be appropriate for the Tribunal to award costs for discretionary reasons: Brodyn Pty Ltd v Owners Corporation - Strata Plan 73019 (No. 2) [2016] NSWCATAP 224 at [24]. The use of "may" in the opening words of s 60(3) indicates that there remains a discretion not to award costs even if the factors are present, to see if they point to the existence of special circumstances in the situation under consideration: Diaspora Holdings Pty Ltd v Owners SP 68608 [2019] NSWCATAP 250 at [17].
In terms of the considerations set out in s 60(3), the respondents submitted that sub-paragraphs (a), (b), (c), (e) and (f) of the subsection were apposite in this case to establish special circumstances, in that the applicant had not complied with the procedural directions of the Tribunal; the applicant had not provided any or any proper evidentiary foundation for its claim against the respondents; the applicant had not formulated a claim with a tenable basis in fact or law; and the applicant had brought proceedings in the Tribunal which were completely misconceived as there was no jurisdiction in the Tribunal to hear and determine the applicant's application.
Having considered the procedural history of the proceedings, as outlined above, and also having considered the respondents' written submissions as to costs, I do not find that the circumstances of this case are out of the ordinary. The applicant appeared at both Tribunal hearings on 2 September 2021 and 19 October 2021, respectively, through Mr Fleming, with some assistance from an employee of the applicant, Ms McKenzie. Neither of them have any legal training. Further, as the respondents accepted in their written submissions, the application lodged by Mr Fleming on behalf of the applicant on 9 August 2021, and the documents the applicant subsequently provided to the Tribunal and the respondents on 24 August 2021 and 8 September 2021, respectively, were not prepared with the assistance of an Australian legal practitioner. In consumer and home building claims involving claims of less than $30,000 it is not out of the ordinary that an applicant chooses not to seek legal advice before bringing an application to the Tribunal. In this instance, at a relatively early stage of the proceedings, in fact at the second directions hearing on 19 October 2021, the applicant decided to withdraw its application. The presiding member had made observations about the 'Question of Jurisdiction' which were put on the Tribunal's record for the first hearing on 2 September 2021. The Tribunal had then transferred the proceedings from the General List to the Home Building List. This was to accommodate the possibility of the proceedings continuing in the Tribunal as a home building claim. Nevertheless, it became apparent at the next Tribunal appearance of Mr Fleming for the applicant (i.e. on 19 October 2021) that he did not think the applicant would be able to establish the Tribunal's jurisdiction under the Home Building Act 1989 NSW (HB Act) to hear and determine the proceedings as a building claim. There was, of course, no final hearing on the merits of the applicant's application, including as to the jurisdiction issue, because as the applicant was permitted to do "at any time" under s 48I(2) of the HB Act, it withdrew the application.
I am satisfied that the applicant at all material times acted in good faith in bringing the application such that it cannot now be said it was bringing a frivolous or vexatious proceeding. I further find that when the proceedings were brought, the applicant did not conduct them in a way which disadvantaged the respondents. Contrary to the respondents' written submissions, the applicant generally complied with the Tribunal's procedural directions, albeit there was late compliance with the direction to provide documents by 30 September 2021. The documents were, in fact, provided by the applicant on 8 October 2021 but well in advance of the second directions hearing on 19 October 2021.
Moreover, I am satisfied that the applicant did not unnecessarily prolong the time in the proceedings; as indicated, the proceedings were withdrawn at the second directions hearing.
In Pines Resort Management Pty Ltd t/as Gateway Lifestyle the Pines v Marsh [2019] NSWCATAP 12 (Pines) the Tribunal's Appeal Panel considered a costs application where an appeal had been withdrawn and dismissed. The Appeal Panel said at [18]:
"As accepted by the respondent, it is generally inappropriate for the Tribunal to embark on a theoretical examination of the appeal to determine questions of costs where the appeal has been withdrawn prior to a final hearing."
I agree with the merit of such an approach as stated in Pines. It is also consistent with the approach taken in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622 where McHugh J stated, footnotes excluded:
"In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence a litigation. Thus, for example, in R v Gold Coast City Council; Ex parte Raysun Pty Ltd, the Full Court of the Supreme Court of Queensland gave a prosecutor seeking mandamus the costs of the proceedings up to the date when the respondent council notified the prosecutor that it would give the prosecutor the relief that it sought. The Full Court said that the prosecutor had reasonable ground for complaint in respect of the attitude taken by the respondent in failing to consider the application by the prosecutor for approval of road and drainage plans.
Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. This is perhaps the best explanation of the unreported decision of Pincus J in The South East Queensland Electricity Board v Australian Telecommunications Commission where his Honour ordered the respondent to pay 80 per cent of the applicant's taxed costs even though his Honour found that both parties had acted reasonably in respect of the litigation. But such cases are likely to be rare.
If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases."
I note that in Pines the Appeal Panel considered the manner in which the appellant had prepared the appeal. At [22] to [23] of Pines the Appeal Panel observed:
"[22] While the respondent did undertake work in the preparation of evidence and submissions, again, nothing was out of the ordinary in respect of the steps taken.
[23] There is nothing in the conduct of this case that would suggest the appellant did not meet its obligations under s 36 of the NCAT Act and, in circumstances, where s 60(1) provides that each party is to pay their own costs, I am not satisfied there is any reason to depart from the position that each party should pay their own costs
In this matter I reach the same conclusion as the Appeal Panel in Pines on the evidence and material before me.
For all of the above reasons, I find that the respondents have not established special circumstances for the purposes of s 60(2) of the NCAT Act. Furthermore, even if special circumstances within any of paragraphs (a) - (g) (inclusive) of subsection 60(3) of the NCAT Act had been established on the available evidence, having regard to all of the considerations referred to above, I would have declined to exercise the discretion to award costs to the respondents.
Given those findings, the appropriate orders of the Tribunal are:
1. Pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 NSW, the Tribunal dispenses with a hearing on the question of costs.
2. No order as to costs, with the intent that each party is to bear their own costs of the proceedings.
3. The respondents' application for costs of the proceedings is dismissed.
[2]
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
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Decision last updated: 14 March 2022